No clear indication observed

With the weakness in the broader market and the lack of positive triggers, the benchmark indices failed to sustain the initial gains. The NSE Nifty closed at 16,496.45 points with a 45.95 points gain. The broader indices Nifty Smallcap-100 and Midcap-100 indices closed at 1.85 percent and 0.86 percent, respectively. The IT is the top gainer with 1.70 percent. Bank Nifty and Fin Nifty also closed with gains of 0.26 percent and 0.40 per cent respectively. All the other sectoral indices ended in negative territory with moderate losses. The market breadth is extremely negative as 1,584 declines and 426 declines. About 60 stocks hit 52 weeks high, and 316 stocks traded in the lower circuit. India VIX declined by 2.35 per cent.

Nifty opened on an optimistic note with 142 points gap up and filled the Friday gap. With a profit booking, the benchmark index closed below the previous day's high. Though it formed a higher low, it is a bearish belt hold candle. Both index and market breadth not improved. Barring Nifty IT, the conviction is missing in all sectoral indices. The recovery after two hours of trading is not helpful in positive closing. The index traded in just 65 points range. All the momentum indicators are showing a decline. As mentioned earlier, the 16,376-16,535 zone will be critical for Nifty. Monday's it closed in this zone, and has not given a clear signal. Only closing beyond these levels will get a clear directional signal. On the hourly chart, the Nifty is still within the upward channel and between the MA ribbon. A move below 16,465 may give weaker signals. For the next three days, as the August monthly expiry, the Nifty may trade between 16600 - 16375 zone with high probability. The rollovers are below the average, indicate a lack of conviction on-trend.

(The author is financial

journalist, technical analyst, family fund manager)